Head-To-Head Comparison: Epsilon Energy (NASDAQ:EPSN) vs. SandRidge Energy (NYSE:SD)

Epsilon Energy (NASDAQ:EPSN) and SandRidge Energy (NYSE:SD) are both small-cap energy companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, earnings, risk, analyst recommendations, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations and price targets for Epsilon Energy and SandRidge Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Epsilon Energy	0	0	1	1	3.50
SandRidge Energy	0	0	0	0	0.00

Epsilon Energy currently has a consensus price target of $7.70, indicating a potential upside of 38.74%. Given Epsilon Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Epsilon Energy is more favorable than SandRidge Energy.

Dividends

Epsilon Energy pays an annual dividend of $0.25 per share and has a dividend yield of 4.5%. SandRidge Energy pays an annual dividend of $0.44 per share and has a dividend yield of 3.9%. Epsilon Energy pays out 104.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SandRidge Energy pays out 21.6% of its earnings in the form of a dividend. SandRidge Energy has increased its dividend for 2 consecutive years.

Earnings and Valuation

This table compares Epsilon Energy and SandRidge Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Epsilon Energy	$44.02 million	2.78	$1.93 million	$0.24	23.13
SandRidge Energy	$125.29 million	3.34	$62.99 million	$2.04	5.59

SandRidge Energy has higher revenue and earnings than Epsilon Energy. SandRidge Energy is trading at a lower price-to-earnings ratio than Epsilon Energy, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Epsilon Energy has a beta of 0.12, meaning that its stock price is 88% less volatile than the S&P 500. Comparatively, SandRidge Energy has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Institutional & Insider Ownership

60.3% of Epsilon Energy shares are owned by institutional investors. Comparatively, 61.8% of SandRidge Energy shares are owned by institutional investors. 7.1% of Epsilon Energy shares are owned by insiders. Comparatively, 1.5% of SandRidge Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Epsilon Energy and SandRidge Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Epsilon Energy	11.75%	6.71%	5.39%
SandRidge Energy	51.77%	10.05%	7.96%

Summary

SandRidge Energy beats Epsilon Energy on 11 of the 18 factors compared between the two stocks.

About Epsilon Energy

Epsilon Energy Ltd., a North American onshore independent natural gas and oil company, engages in the acquisition, development, gathering, and production of natural oil and gas reserves in the United States. The company operates through Upstream and Gathering System segments. It has natural gas production in the Marcellus Shale in Pennsylvania; and oil, natural gas liquids, and natural gas production in the Permian Basin in Texas and New Mexico, and Anadarko Basin in Oklahoma. Epsilon Energy Ltd. was incorporated in 2005 and is based in Calgary, Canada.

About SandRidge Energy

SandRidge Energy, Inc. engages in the acquisition, development, and production of oil, natural gas, and natural gas liquids in the United States Mid-Continent. The company was incorporated in 2006 and is headquartered in Oklahoma City, Oklahoma.